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January 9, 1984


The opinion of the court was delivered by: Mihm, District Judge.


In 1973, a massive flood partially destroyed sections of the levees and inundated much adjacent farm land in the vicinity of the Mackinaw River. A group of individual farmers who owned the land adjacent to the river approached the United States Army Corps of Engineers to obtain relief following the 1973 flood. Feasibility studies by the Corps developed several possible alternatives, including channelization of the river. The Corps states, however, that it decided to limit its response to a contract for restoration of the destroyed levees, a contention which the Plaintiffs dispute. William Hellemann was the successful bidder on the Corps project. In the meantime, Hellemann was also in contact with individual farmers and with officials of Tazewell County, seeking to form separate contracts for channelization of the river. Shortly after the Corps contract was approved, Hellemann entered into contracts with the group of individual farmers and with Tazewell County for channelization on this section of the river. The Tazewell contract was limited to channelizing one segment in the vicinity of a highway bridge which was vulnerable to flooding.

On or about March 7, 1979, Bridge No. 171, owned by Chicago and Illinois Midland Railway Company ("Midland") was washed out and on June 3, 1980, Bridge No. 168 was washed out. Plaintiff Midland Railway Company brought a four count complaint under the Rivers and Harbors Act ("Act"), alleging violations of 33 U.S.C. § 401, § 403, § 407, and § 565. Midland alleges that the damming and channelization of the Mackinaw River caused the river waters to flow with increased force and velocity. Midland claims that it was forced to spend substantial sums of money to repair the damage to the two bridges and that additional amounts of money were lost because train traffic had to be halted and diverted over other railroad lines. The complaint named Corps officials, individual farmers, and William Hellemann and Roecker Bros., both contractors, as Defendants. In addition to its claim for money damages to the two damaged bridges, which Midland alleges were caused by the actions of the Defendants in 1973 to 1975, the Plaintiff seeks injunctive relief to restore the levee elevations to original configurations with reference to the 1973 to 1975 work of Hellemann on property owned by Defendant Horn, and the 1981 Corps related work on the property south and east of Bridge No. 171.

After the initial complaint was filed, there began a real "buck passing" contest. First, the Corps officials cross-claimed against the individual landowners (except for B. Knachstedt), Hellemann, and Roecker Bros. under Federal Rule of Civil Procedure 13(g). The Corps officials claim that Hellemann and Roecker Bros. agreed to obtain all the necessary permits required for the work on the river and also agreed to indemnify the Corps officials from liability arising out of their own negligence. The Corps officials also claim that the individual landowners agreed to hold the Corps harmless from all liability. Second, Roecker Bros. filed a cross claim for indemnification from the Corps officials and the individual landowners as joint tortfeasors. Third, remnants of the group of individual landowners filed a third party complaint against three other Tazewell County landowners who allegedly participated in the damming and channelization of the river. These landowners are Goldsmith, Look, and Clayton. Finally, Mabel Oberle, a landowner Defendant named in the original complaint, brought a third party complaint against eight other Tazewell County landowners who allegedly participated in the damming and channelization. On July 29, 1982, this Court entered an order dismissing Roecker Bros. from this case on the grounds that Roecker Bros. signed a repair contract merely as an accommodation party and not as a joint venturer. Summary judgment was also later granted on cross claims naming Roecker Bros. as a cross defendant.

Defendants John O. Marsh, Jr., Secretary of the Department of the Army of the United States, the United States Corps of Engineers, Lt. General William C. Gribble, General Robert Moore, Colonel James M. Miller, and Angelo Zerbonia, hereinafter referred to as "federal defendants", have moved for an order granting them summary judgment. Defendant William Hellemann has also moved for summary judgment on the complaint and on the first cross-claim filed by the federal defendants against him.

The federal defendants assert that there are three grounds upon which summary judgment should be granted in their favor. First, the federal defendants claim that the District Court lacks subject matter jurisdiction in that the Plaintiff could only be pursuing its claim under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), and the Corps action in this case in repairing the levees comes within the discretionary function exception of 28 U.S.C. § 2680(a). Second, the federal defendants argue that the Rivers and Harbors Act does not provide for a private right of action, citing California v. Sierra Club, 451 U.S. 287, 101 S.Ct. 1775, 68 L.Ed.2d 101 (1981). Finally, the federal defendants allege that the United States is exempt from liability for all flood damages under 33 U.S.C. § 702c which provides that "no liability of any kind shall attach to or rest upon the United States for any damage from or by flood or flood waters at any place".

Defendant Hellemann, in his motion for summary judgment, adopts and incorporates the portion of the memorandum filed by the federal defendants in support of their motion for summary judgment upon the grounds that the Rivers and Harbors Act does not authorize a private right of action. Second, Defendant Hellemann sought summary judgment based on the argument that he, as an independent contractor, owed no duty to third persons for damages resulting from the performance by an independent contractor in a workmanlike manner of plans, specifications, and instructions which the contractor has contracted to follow. At a hearing before this Court on October 19, 1983, this Court denied Hellemann's motion for summary judgment based on this independent contractor argument holding that genuine disputes as to material facts existed.


In California v. Sierra Club, 451 U.S. 287, 101 S.Ct. 1775, 68 L.Ed.2d 101 (1981), the United States Supreme Court held that both the language of the Rivers and Harbors Act and its legislative history give no evidence that Congress intended to create a private cause of action under the Act. In that case, private parties sought injunctive relief to prohibit the construction and operation of water diversion facilities under the authority of 33 U.S.C. § 403. The Court held that the plaintiffs had no cause of action.

Plaintiff Midland argues that the federal defendants are collaterally estopped from raising the issue that the Plaintiff has no cause of action under the Rivers and Harbors Act. The Plaintiff claims that the same issues relating to these same Defendants, and relating to the same time frame and same style of claim were all considered by this Court in earlier companion litigation. In that case, People of the State of Illinois ex rel. William J. Scott v. Hoffman, et al., judgments adverse to the federal defendants were entered and the federal defendants did not appeal. In an order entered on February 20, 1979 by this Court, it was found that:

  "7. The Mackinaw River has been used in historical
  times for commerce and trade and is therefore a
  navigable river of the United States within the
  meaning of the term `navigable' as used in all United
  States Statutes governing the use of navigable
  waters, including, but not limited to,
  33 U.S.C. § 401 and 403.
  10. Without admitting which of the Defendants
  actually directed the channelization and damming by
  Hellemann and

  Roecker Bros., Inc., federal defendants do
  acknowledge that the filling and channelization
  violated the following laws:
    (a) the building of the earth plugs in the
    navigable stream and the filling of a navigable
    stream and the altering of the course of the
    navigable stream — all of which was done at this
    location on the Mackinaw River — was performed
    without authorization from the Secretary of the
    Army in violation of Title 33 U.S.C. § 403."

Plaintiff alleges that the federal defendants in the earlier litigation had the opportunity to raise any defense reasonably within the limits of the law, and that they were well advised of the nature of the claims, the defenses they could assert, the effect of the judgment in that case and the consequences to reasonably flow from their decision as to how to conclude that earlier litigation. The Plaintiff asserts that collateral estoppel precludes the applicability of California v. Sierra Club to the present claim. Plaintiff points to Federated Department Store v. Moitie, 452 U.S. 394, 395, 101 S.Ct. 2424, 2426, 69 L.Ed.2d 103 (1981), in which the Supreme Court stated that the res judicata consequences of a final, unappealed judgment on the merits are not altered by the fact that the judgment may have been wrong, or rested on a legal principle subsequently overruled in another case. 452 U.S. at 398, 101 S.Ct. at 2427.

In Parklane Hosiery v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979), the Supreme Court held that the doctrine of equitable estoppel could be used affirmatively to stop a defendant, once having lost an issue, from raising a defense. The Supreme Court in that case ruled that trial courts have broad discretion to determine when offensive collateral estoppel should be applied. If a party received a "full and fair" opportunity to litigate its claim in the former action, collateral estoppel may be applied except where a plaintiff could easily have joined in an earlier action or where the application of the principle would be unfair to the defendant. Collateral estoppel may be unfair to a defendant if a defendant in the first action is sued for small or nominal damages and has little incentive to defend vigorously, particularly if future suits are not foreseeable, or where a second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result.

In Parklane Hosiery, the Supreme Court denied the defendant the opportunity to relitigate the issues in a subsequent legal action brought against it by a new party where those same issues of fact had been adjudicated adversely to it in a prior equitable action. Thus, a party may be precluded from relitigating issues that were or could have been raised in a prior proceeding.

The federal defendants correctly point out that Parklane Hosiery presented the question of "whether a party who has had issues of fact adjudicated adversely to it in an equitable action may be collaterally estopped from relitigating the same issues . . . in a subsequent legal action brought against it by a new party". 439 U.S. at 324, 99 S.Ct. at 648 (emphasis added). In this case, the federal defendants are not attempting to relitigate the factual issues but rather a legal issue. The federal defendants also correctly assert that res judicata is inapplicable in the present case in that res judicata will preclude parties or their privies from relitigating issues that were decided or could have been decided in a previous action. Since Plaintiff herein was not in any way a party to the previous lawsuit, Plaintiff was not in privity to any of the parties and collateral estoppel, not res judicata, is the only doctrine in question in this case.

In Montana v. United States, 440 U.S. 147, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979), the Supreme Court stated that the determination of the appropriate application of collateral estoppel necessitated three inquiries:

  "first, whether the issues presented by this
  litigation are in substance the same as those
  resolved against the United States in (previous
  litigation); second, whether controlling facts or
  legal principles

  have changed significantly since the state-court
  judgment; and finally, whether other special
  circumstances warrant an exception to the normal
  rules of preclusion." 440 U.S. at 155, 99 S.Ct. at

The federal defendants state that the Plaintiff cannot satisfy the second and third factors stated in Montana due to the intervening Supreme Court decision in California v. Sierra Club. Lower court decisions prior to that case concerning the right to a private cause of action under the Rivers and Harbors Act had been conflicting. To hold that the federal defendants are now estopped from raising the California v. Sierra Club decision, the federal defendants assert, would be grossly unfair.

The federal defendants also argue that collateral estoppel should not be extended to consent judgments. In support of this proposition, they cite United States v. International Building Company, 345 U.S. 502, 73 S.Ct. 807, 97 L.Ed. 1182 (1953) and Lawlor v. National Screen Service Corp., 349 U.S. 322, 75 S.Ct. 865, 99 L.Ed. 1122 (1955). In both of these cases, the ...

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